Are you debt-free? Has it made much difference to you?

Currently debt free and the only change to that might be a mortgage in the next year or two. I didn’t find having debt in the past a particular weight on my shoulders as I could afford to service it and I sort of forgot about it - I made a few mistakes in my early twenties, had the bad credit rating for a few years as a result and so far haven’t done the same again. What I do find really liberating though is having a good nest egg set aside so that no matter what happens (illness, job loss, a need to quit my life and move to Mexico...) I won’t have to worry about finances. I also only work part-time now as I’m at the salary stage in my career that I can afford to.

I wouldn’t say I’m skipping through the daisies about it 24/7 but I know I’m fortunate to not have to worry about money very much.

Maewyn Succat

redarmyblues wrote: »

Buy the cheapest house that will suit your needs, don't add on extensions or do unnecessary Major upgrades, when you are ready to move up the ladder don't, stay where you are and buy another house and rent it keep doing that until you have 3/4, retire.

On paper that sounds like a great plan. In reality you would need to have rocks in your head to actually set out to become a landlord in Ireland. This would have been a good strategy in the past but not nowadays.

Maewyn Succat

Maewyn Succat wrote: »

On paper that sounds like a great plan. In reality you would need to have rocks in your head to actually set out to become a landlord in Ireland. This would have been a good strategy in the past but not nowadays.

between that and over-extending yourself on loans- highly geared is a risky business and not for the amateur

lmimmfn

It's not just being debt free though, you need a semi decent rainy day fund to really be free( assuming pension is already decent) .
One could argue its setting another milestone after the huge milestone of being debt free( from mortgage etc. ) and that it goes on and on but I digress, after that it's just not caring so much about money.

Galwayguy35

Only loan is the mortgage and that is the only loan I will ever have, I will have to buy a car this year but should have enough saved to cover the cost of it.

23 years left on the mortgage but it's a tracker so the interest is small on it.

Inspector Coptoor

Only loan is the mortgage.
It’s a decent chunk but in a good area and the house value is €200k more than mortgage.

Paying mortgage, saving and investing.
Childcare is a drain at 4 figures a month but won’t always be Paying it.

Carry

Are you debt-free? Has it made much difference to you?

Yes, it did.

I'm finally debt free, three years now. Mortgage paid off, permanent overdraft paid off, credit union loan (for a new roof for the house) paid off, some more years ago the bloody student loan paid off.

I never took out another loan, used the credit card only for emergencies, only bought stuff with money I actually had. Living within my means, so to say.

It's effin marvellous to not to worry anymore about debts, being able to spend money on stuff I really need (improving/repairing the house) and things that enhance my wellbeing, and being able to save money for rainy days.

But since I've been living on a tight budget almost all my life I'm so used to it that I'm not able to throw my money around. I'm still in awe when I realise that I can actually afford a holiday or not to work for some weeks (being self-employed).

And yes, I'm pretty smug about it, knowing the struggle was worth it eventually.

Gael23

Apart from mortgage yes

ILoveYourVibes

Yes ....and HELL YES.

IM WEEELY FWEE

elperello

Carry wrote: »

Yes, it did.

I'm finally debt free, three years now. Mortgage paid off, permanent overdraft paid off, credit union loan (for a new roof for the house) paid off, some more years ago the bloody student loan paid off.

I never took out another loan, used the credit card only for emergencies, only bought stuff with money I actually had. Living within my means, so to say.

It's effin marvellous to not to worry anymore about debts, being able to spend money on stuff I really need (improving/repairing the house) and things that enhance my wellbeing, and being able to save money for rainy days.

But since I've been living on a tight budget almost all my life I'm so used to it that I'm not able to throw my money around. I'm still in awe when I realise that I can actually afford a holiday or not to work for some weeks (being self-employed).

And yes, I'm pretty smug about it, knowing the struggle was worth it eventually.

There are several articles and studies available online that concentrate on the issue of spending savings in retirement.

Main factors seem to be the difficulty transitioning from a saving habit of a lifetime and a fear of running out of money.

Different spending patterns have been identified at various stages of retirement.

This one from Canada is interesting -https://www.theglobeandmail.com/investing/personal-finance/retirement/article-why-arent-retirees-spending-their-savings/

Outkast_IRE

Just a reasonable monthly mortgage payment. All other loans cleared a few years back.


Currently saving for a car, setting aside about 200 or so a month towards it. My current car is about 10 years old but low mileage and in good condition, so i am happy to just keep saving slowly and eventually buying a 2 year old used car.



I find revolut of massive benefit to me, i have about 10 savings vaults towards alot of my yearly big expenses, holiday savings, house fund etc.

Galwayguy35

Galwayguy35 wrote: »

Only loan is the mortgage and that is the only loan I will ever have, I will have to buy a car this year but should have enough saved to cover the cost of it.

23 years left on the mortgage but it's a tracker so the interest is small on it.

It’s much better financial management to put a small bit of your savings towards the car and finance the rest (thus keeping your savings) than using them all on a car.

I find people’s fear of a loan quite bizarre, loans are a valuable tool in managing your finances.

Outkast_IRE

Outkast_IRE wrote: »

Just a reasonable monthly mortgage payment. All other loans cleared a few years back.


Currently saving for a car, setting aside about 200 or so a month towards it. My current car is about 10 years old but low mileage and in good condition, so i am happy to just keep saving slowly and eventually buying a 2 year old used car.



I find revolut of massive benefit to me, i have about 10 savings vaults towards alot of my yearly big expenses, holiday savings, house fund etc.

It would be a better use of the money to put it into your pension fund and finance the car. Or save a decent deposit and finance the rest, but put the lions share into your pension. You get it back and more, compared to investing in a depreciating asset.

Candie

Candie wrote: »

It would be a better use of the money to put it into your pension fund and finance the car. Or save a decent deposit and finance the rest, but put the lions share into your pension. You get it back and more, compared to investing in a depreciating asset.

The problem with putting it into a pension is you can’t access it until your retire, and while I fully agree with paying into a pension I would be slow to be lumping everything into it like is often suggested, you mightn't even live to benefit from it.

Judith Shaggy Maggot

Judith Shaggy Maggot wrote: »

The problem with putting it into a pension is you can’t access it until your retire, and while I fully agree with paying into a pension I would be slow to be lumping everything into it like is often suggested, you mightn't even live to benefit from it.

The overwhelming likelihood is that you'll live to pension age, and decades beyond. It's all very well living for now and of course people should enjoy life, but if you can do that and put some money into your pension fund, which garners a contribution, then that's a sensible thing to do.

Relying on the State to provide is a recipe for poverty in old age.

garbanzo

With a bit of luck we hope to be totally debt free later this year. The only debt we have now is the mortgage. I intentionally cleared all other loans in the last few years. Felt good as each one was cleared.

Home loan was taken out in 2005 spread over 20 years. Have been overpaying for the last three years and added a lump sum too which has taken a few years off the term. It’s a fair chunk out of our income each month.

Being debt free and never borrowing again is a real life ambition of mine. We’re not there yet but the thoughts of it really fill me with happy vibes. I’m feeling like we are now within touching distance of it. I do think it is important not to obsess over it though. You have to enjoy life in the here and now. The key, in my opinion, is to achieve a balance between achieving debt free status and enjoying your life.

Will report back on how it all pans out....

g

Neames

Ran up a lot of credit card debt many years ago.

Cleared all that and was lucky to get a tracker mortgage when they were being offered.

So recently I've started overpaying in the mortgage and have been saving steadily for a few years now.

arybvtcw0eolkf

KKV wrote: »

A fella that works with my brother finished his mortgage and immediately reduced his hours to part time and has claimed he just goes to work now for something to do and he'd never work a full time job again. I wonder is he legitimately happy with that, or after 6 months is he bored to death sitting around the house all day.

I've cleared my mortgage and two college loans too. I've almost always worked a full time plus a part time job. Since clearing the loans I've given up the part time work (I was a bouncer and sometimes barman).

I could give up my full time job (I'm a soldier) and live on my pension but l genuinely love my job (I'm certainly not staying for an army wage). I'm a very active sports person and thought I was giving my training 100% when I held down a second job but its only since jacking that in that I realize now how much it restricted my life.

Now my work life balance is just about perfect. I'm not completely flush with money but I've a nice buffer and can get out for meals, drinks, travel etc now without worrying too much about budgeting for it.

Yea life is pretty good atm, but it hasn't always been like this. Raring two children on an army wage was very tough, putting them through college really meant I needed a second job, so I've been there during the tough times.

To anyone with a young family and a mortgage, what can I say.. It'll be worth it some day, and some day when the mortgage is paid off and the kids have graduated and set out on their own lives you'll realized it went in the blink of an eye, you'll get there.

Galwayguy35

Judith Shaggy Maggot wrote: »

It’s much better financial management to put a small bit of your savings towards the car and finance the rest (thus keeping your savings) than using them all on a car.

I find people’s fear of a loan quite bizarre, loans are a valuable tool in managing your finances.

Yes that is true but the interest on a loan means you end up paying more in the long run.

DelBoy Trotter

I've no debt at the moment thankfully. I got a loan in my late teens for a motorbike, and this ended up being topped up and rolling over for about 13 years for bikes, and cars. About 6 years ago, I got pissed off looking at the loan, so set about clearing it. I have been debt free for probably close to 5 years now, and have been saving for a mortgage deposit in that time. The only loan I can see myself having in the next while is the mortgage

PommieBast

Pretty much debt-free now. Twice in the past I have maxed out my credit card, and it seriously screws up sleeping patterns.

GreeBo

Just the mortgage, it's very large and has several decades left on it, but it's within our means so not concerned about it.
If the arse falls out of our lives we can just sell it and downsize.

Outkast_IRE

Candie wrote: »

It would be a better use of the money to put it into your pension fund and finance the car. Or save a decent deposit and finance the rest, but put the lions share into your pension. You get it back and more, compared to investing in a depreciating asset.

I completely see the logic in that but to be honest i would be of a fairly strong belief that we are facing into another economic downturn sooner rather than later, as i work as a consultant engineer once the economy slows down construction and engineering soon follow, so to me personally i would rather build up the savings myself and if there was quick economic change i would have only minimal debt and outgoings to service debt.

Nigel Fairservice

I'm in my mid 30s and I have never had a loan. My parents always told me never borrow money for something you can reasonably save for and I've stuck to that. Everything I have is my own. Will probably be getting a mortgage in the next year or 2 though.

Potential-Monke

I've been in debt since I turned 18. I'm 36 now, so spent half my life in debt so far. First loan was for college, then for a car, a holiday, mortgage, another car, and lots of little loans in-between for smaller things. Cue crash and now I'm about €25k in debt with nothing really to show for it other than a 10 year old car and bitterness towards mortgages. I will be in debt for the foreseeable and can't see any way out other than a lotto win.

It's a combination of poor money management, terrible lending practices and some shade being thrown at the education system (couldn't do my favourite subject in the Leaving as it was clashing with French, my least favourite) that has led me here. I'm starting to realise i'm bitter, angry and constantly finding the negatives in everything these days, but I'm happier than I was with the house and "good" job. I'm making some changes, again slowly, in my life to prepare for hopefully, eventually, being debt free, and I've no doubt in my mind that I will feel the weight lifting off my shoulders on that day, just like the weight I felt when the house finally sold for only a €20k deficit (was expecting €40k+).

Die Hard 2019

I'm debt free, in the last few year since I've started taking it easier I work 39 hours in a factory and 21 hours (3 X 7 hour evenings ) and 1 hours over the weekend .

I don't have a point other than I set goals and work for them.

Sleepy

I've a year and a half left of various loans we took out to fix up our house when we bought it and about 25 years left on the mortgage. Hoping to finally sort out a pension in the next few months but realistically, I think that if I do ever get to retire, we'll have to downsize and relocate down the country somewhere in order to fund it.

weemcd

Never had a loan, only a small overdraft and a small credit card. I've not been in my overdraft for several months and my credit card is basically paid off. Other than that I have a small amount to pay off a laptop, and my phone contract which runs out in July then I'm essentially debt free.

I've been working on improving my credit rating which was actually pretty good, but I'm moving towards the top of the excellent category with Experian. I'll be planning on getting a mortgage in the next six months or so, but for an amount that will work out less than the current cost of renting alone. It's daunting but I'm looking forward to it. I'm going to have a couple of very lean months (probably at least the rest of this year) but I'm ok with that and I haven't rushed into anything yet.

I've been looking at trading online to try and get some of my money invested but I've only started with that and it's an experiment for very small sums of money. I've also cut a lot of my unnecessary spending down of late and cancelled a few payments for things I don't really need. I should be getting a reasonable pay increase over the next month or two which should also help things. I've not been paying into my pension for the last two months in order to clear off a few things but I plan on restarting contributions in a few months time around 5% with 5% matched from work.

After that anything left will be spent on furniture and house bits and pieces with an aim to be well set up in about a year, I'm 32 in June btw.

wexfordman2

As a young lad, in the mid 80's my father's business went under and we lost the house, moved in to rented accomadation, and the family struggled for a good few years. Dad when he died in the mid 90's was pretty much broke.

Never forgot that, the feeling of losing your home, and the roof over your head. Was always terrified of borrowing money, especially something like a mortgage, given the long term nature, I mean, how could I stand over and gaurantee repaying a mortgage for 20 or so years?

That sort of thing keeps me awake at night.
Anyway, through a mixture of prudence, work and good fortune, am now debt free (my mortgage is a tracker, and very low, the esb bill is nearly higher). I ploughed extra cash into my mortgage repayments in the early years and that helped a lot. Have savings that could repay the outstanding mortgage, but with such low.interst rates, it's not worth it.

I got laid off from.work about 2.5 years ago, and since then, have taken a more relaxed approach to life, I know I and my.family wont lose the roof over our heads, so no more sleepless nights.

I am contracting now, which is less stable of an income, but again less of a worry,.and I can be a bit flexible.with my time. Aiming to retire by 60, please god (a fortune teller told me when I was 12, that I would live till I was 66, so if I don't retire.at.60, there goes my pension)

andekwarhola

Mortgage and a loan. Both very manageable. Would be great to be debt free but I'm not averse to having recurring debt like the above as long it's manageable. Also pay into a pension and save a bit for whatever the kids will do, college, trade, deposit whatever.

Whenever I get a pay rise or bonus these days, I don't bother trying to lump off the loan or mortgage, I just increase/put it into the pension.

Grueller

I am 39, have the mortgage cleared, no loans on the wife's car or the jeep, which are 12 & 14 years old respectively.
Paying the mortgage off after dreaming about it for years was the most underwhelming thing ever!!! However that may be due to the fact that I still pay €38k per year in repayments on farm and business loans.

Sunrise_Sunset

No car loans or consumer debt, but I do have a mortgage. I started making overpayments on it a few months ago and aim to clear it about 7 years early.
I'm also saving an emergency fund of 6 months expenses, saving for a new car and for kids college.
One area I need to get the ball rolling on is for a pension.
In the past I had credit card debt and car loans and by comparison now, yes it has made a huge difference to my life to not have to worry about repaying them. But I think when I have my emergency fund fully funded is when I'll feel the biggest difference.

Sunny Disposition

Debt free for many years, tbh I only ever had debts for a very small amount of time, was very lucky. Because I have been lucky enough to be debt free nearly all my life I wouldn’t know as much of what it’s like to be saddled with debt, but obviously it is a great advantage not to have such pressure. I’m pretty sure I missed a lot of stress.

It’s very important to buy property at the right time in Ireland because we have a volatile market. Get it wrong and you’ll be on the hook for a large debt for years more. Young people who bought property in 2007 ended up paying hundreds of thousands more than those who did so three/four years later.

ILoveYourVibes

Yes and its made a huge difference.

I have much more financial freedom.

theteal

Pfft no, why would I spend my own money when there are so many interest free loan options available? I've a few grand owed on a few 0% credit cards. I could have paid up front for these products/services but that makes zero financial sense. The monthly payments are money that would be going to savings anyway (usually to buy said products/services) so it's not missed.

Only in year 3 of the mortgage, that's being overpaid but can only do 10% without additional fees. I'll add a lump payment at every fixed term renewal. Housing has to be paid for, always has as far as I can remember so that does not feel like any weight around my neck, that'll go to the nest egg too when housing payments are no longer required.

ILoveYourVibes

theteal wrote: »

Pfft no, why would I spend my own money when there are so many interest free loan options available? I've a few grand owed on a few 0% credit cards. I could have paid up front for these products/services but that makes zero financial sense. The monthly payments are money that would be going to savings anyway (usually to buy said products/services) so it's not missed.

Only in year 3 of the mortgage, that's being overpaid but can only do 10% without additional fees. I'll add a lump payment at every fixed term renewal. Housing has to be paid for, always has as far as I can remember so that does not feel like any weight around my neck, that'll go to the nest egg too when housing payments are no longer required.

These are not loans. You are using a credit card which has a certain period of no interest. Usually a very brief period. Or an overdraft.


Its definitely not a period of months ..if you are paying monthly etc you are paying interest on a credit card as the interest free period ends after about 2 months. And even then you have to make the purchase on the first day of your statement period. Which is unlikely you do all the time.

They say you have like 2 months free interest. But that is the MAX you CAN have. If you don't purchase the item on the first day of your statement you don't get the full 2 months or whatever it is for your bank.



Unless you are buying everything on the first day of your statement then paying off the balance by the end of the interest free period. (which would be really awkward) then you are paying interest.

All personal loans etc have interest.

Not debt free, but reduced down a good bit, to Mortgage now and just my car top up ( paid by expenses in my company)

Honestly, cant say it made much of a difference, bills still go out and such. It means a few more pints in the pub and a small bit more savings, but not had as much of an effect as I would thought.

My mortgage went from 1100 a month to 530.

Wanderer78

Debt free, nearly always have been, but don't have much to show for

paw patrol

only a mortgage which is cheaper than an equivalent rental by a good chunk
I consider myself debt free and it feels good.

When I was younger i took out a few cars loans but never again.
the notion of being down a few hundred each month was v frustrating.

Wanderer78

paw patrol wrote:

only a mortgage which is cheaper than an equivalent rental by a good chunk I consider myself debt free and it feels good.

Thought a mortgage was a debt, but maybe I'm wrong

hero25

If I could go back in time and give advice to a younger me it'd be ..... aim to have the mortgage clear before the kids start college.
If you've >1 child in college at a time, it's the equivalent of very large mortgage - it'd be great if the actual mortgage was cleared when Leaving Cert is being done!
(Bear this in mind as you move houses over the years and obtain new mortgages!)

theteal

ILoveYourVibes wrote: »

These are not loans. You are using a credit card which has a certain period of no interest. Usually a very brief period. Or an overdraft.

Its definitely not a period of months ..if you are paying monthly etc you are paying interest on a credit card as the interest free period ends after about 2 months. And even then you have to make the purchase on the first day of your statement period. Which is unlikely you do all the time.

They say you have like 2 months free interest. But that is the MAX you CAN have. If you don't purchase the item on the first day of your statement you don't get the full 2 months or whatever it is for your bank.

Unless you are buying everything on the first day of your statement then paying off the balance by the end of the interest free period. (which would be really awkward) then you are paying interest.

All personal loans etc have interest.

Nope, plenty of balance transfer cards around. My HSBC was 27 months at 0% and Natwest was 24. Both set with regular DD to be paid off at their last month. Both cards nicely stowed away in the bottom of a wardrobe never to be seen again. If I have a big purchase, I'll do it on the "regular" credit card (which is cleared monthly) and then get new balance transfer card and that'll do the job for however many months. This is not a regular thing obviously but buying stuff costing a few thousand is not a regular thing for me so the process works. I'll be buying a car for herself before the year is out, that'll be another one - although HSBC will be clear by then.

Again, these purchases could come from savings but it makes zero sense to go near them if the banks are providing free money.

LeYouth

I don't have any debt but i Don't have any money either.

I was thinking about selling my body to some cougar. Lol.

paw patrol

Wanderer78 wrote: »

Thought a mortgage was a debt, but maybe I'm wrong

I thought i clarified it by saying i was paying a lot less than an equivalent rent.
gotta live somewhere and instead of saying "i'm debt free" that I "consider" myself debt free.

I think you knew that

Wanderer78

paw patrol wrote: »

I thought i clarified it by saying i was paying a lot less than an equivalent rent.
gotta live somewhere and instead of saying "i'm debt free" that I "consider" myself debt free.

I think you knew that

you re not debt free, but your debts are obviously well manageable, fair play to you, many are not in that situation

Wildly Boaring

Wildly Boaring wrote: »

Took on small debt this year to move house.

Have very manageable PCP on main car.

Means only one of us have to work.
Massive weight off, we have young kids.
Wife is at home and can do playgroup, toddler mornings etc. If a kid is sick or during school holidays we're grand.
She'll go back part time or job share when they're all in school.

We're looking at a 4 day week for May and a 3.5 day for June. Lockdown dependent. Construction mainly outdoor so should be ok???

That small loan is 30k over 3 years and bank will put to 5, 7 or 10 years no problem. (Don't want to due to interest but might be best yet)

No problem paying current repayments on 3.5 day week. But you know what comes after that............

PCP on main car is fine, about 250 a month.

6 months ago we had massive savings and no loan on last house.
Then again 12 months ago we were considering renting out first house with big mortgage for new house. We could be up **** creek entirely.

Glad we shot down that plan and stuck out the sale. It's a year exactly since the house went on the market.

I'm very debt adverse, wife generally is but had heart set on house type/location and was prepared to go all in.

ELM327

Mortgage, less than 100k left at 400 p/m
Credit card - 0 left, down from 12k this time last year (dont ask)
Personal loan - 35k remaining

Savings, stocks, shares, stock options over the next 2 years exceed the personal loan amount. So I'm not really in any sort of debt except the mortgage.

Wanderer78

ELM327 wrote: »

Mortgage, less than 100k left at 400 p/m
Credit card - 0 left, down from 12k this time last year (dont ask)
Personal loan - 35k remaining

Savings, stocks, shares, stock options over the next 2 years exceed the personal loan amount. So I'm not really in any sort of debt except the mortgage.

go on, tell us, sounds like it was a bitta craic?

ELM327

Wanderer78 wrote: »

go on, tell us, sounds like it was a bitta craic?

Just buying stuff I didnt need, cars, cruise holidays etc.
I've lowered the limit to 6k and put it in the freezer so it's there for emergencies but I can't be trusted to use it correctly day to day! Too impulsive!

Wanderer78

ELM327 wrote: »

Just buying stuff I didnt need, cars, cruise holidays etc.
I've lowered the limit to 6k and put it in the freezer so it's there for emergencies but I can't be trusted to use it correctly day to day! Too impulsive!

ah fcuk it, **** happens, sounds like you re well able to manage your money. got rid of my credit card years ago, no real need for it anymore, im too boring for fun spending like you